Prineville facing housing crunch

Home building has not kept up with rebounding economy

Jessy Hansen lives with her husband, Will, and their 4-year-old daughter in one bedroom of a sublet house in Redmond.

They occupy one side of the room, their daughter the other, Jessy Hansen said. Even so, it’s a better situation than the motel room they previously occupied in Madras.

“We were planning on being here six months,” she said, “but we’ve been here almost a year.”

The Hansens pay $700 a month, but expect the rent will go up to $750 or $775 soon. They started looking for a cheaper place in Prineville, or Redmond, and posted a Craigslist ad. Bend was out of the question.

“Bend is great if you are highly into spending money on recreational activities like paddle-boarding or biking or skiing, but just to live there is incredibly expensive,” said Hansen, 29.

She said Thursday she reposts the ad every day.

She’s not alone. While Crook County’s economy continues to rebound, housing has not kept pace with demand in Prineville, its largest city and county seat.

The annual survey of rental properties by the Central Oregon Rental Owners Association in April discovered that, although average rents have fallen since last year, vacancies were practically nonexistent. Only 0.5 percent of 187 homes for rent were available in April, according to the survey. No apartments were available that month. Homes are being built, but outside of an affordable housing project just now getting underway, the market favors higher-end homes with price tags above the median sales price.

Home prices in Crook County have increased 82 percent in three years, according to The Beacon Report, a monthly summary of home sales in Central Oregon. The median sales price for a single-family home reached $144,000 in Crook County in the first quarter. That’s up from a median sales price of $79,000 for the first quarter of 2012.

“A lot of good things are happening” in Prineville, said Joan Dudley, a real estate broker in the city. However, she said Tuesday, “a deep concern of mine is to provide housing for the elderly and working folks. If we don’t, where will they go?”

According to the U.S. Census Bureau, median household income in Crook County stood at $39,000. At that level, a monthly mortgage can be a hard target to hit, Dudley said.

“We’re at critical mass,” she said. “We don’t have affordable housing anywhere in the area.”

Those wanting to buy properties below $100,000 at 4 percent interest would face mortgage payments in the upper $800- to $1,000-a-month range, she said.

But many lower-priced homes are in poor condition, Dudley said, and lenders will not finance them.

Part of Prineville’s housing shortage emanates from economic revitalization, said City Manager Steve Forrester.

Crook County recovered all the jobs lost, about 220, when its third largest employer, Woodgrain Millwork, starting shutting down the major part of its Prineville operation in November. The county continued to add jobs — 70 more than expected in April, for example — and the unemployment rate, at 10.8 percent in April 2014, a year later had fallen to 8.3 percent, according to the Oregon Employment Department.

Construction projects in the city — a new hospital and elementary school and expansion of an Apple data center — provided jobs to some former Woodgrain employees. Others found work outside of town, and the remainder qualified for job retraining.

New building activity stimulated further activity in Prineville’s stores, restaurants and motels, Forrester said. He and his wife, Kim, own one, a Subway sandwich shop on Third Street. Business is good, he said, and they’re looking for a second location. Last year, downtown businesses accounted for $130 million in renovation and expansion projects, he said.

City Planning Director Phil Stenbeck has also seen the growth.

“In 2014, 25 businesses either moved to Prineville, expanded on site or moved to a bigger building,” Stenbeck said. “From that, what you saw was jobs being created.”

It also created a demand for housing that edged home prices higher and slashed the rental vacancy rate to nothing, they said. Builders answered the demand by pulling as many home-building permits so far this year, 17, as they received in all of 2014, Stenbeck said. A builder also received a permit for a low-income housing project.

That project, about to break ground, will provide housing for low-income tenants. Brooks Resources Corp., with Pacific Crest Affordable Housing LLC, is set to build 26 units in a multifamily housing development on 4.5 acres of the IronHorse subdivision in northeast Prineville. That plan, announced in November, is moving forward, said Romy Mortensen, vice president of sales and marketing for Brooks Resources.

“The exact day to break ground is still to be determined,” wrote John Gilbert, co-operating manager of Pacific Crest Affordable Housing LLC, in an email Thursday. “Hoping it will be within a week.”

Those units will go to tenants who qualify based on their incomes. Buyers of market-rate housing have homes to choose from, but, like buyers in Bend, should prepare for sticker shock.

“A new home in Prineville in 2013 sold for $189,000,” Stenbeck said. “The same home in 2014 was $239,000.”

The median price of a single-family home sold in Crook County hit a recent peak in late 2013 at $145,000 after falling to $71,000 in early 2011, according to The Beacon Report. In 2007, the median sales price in Prineville stood at $207,000.

In addition to economic growth in the city itself, the surging Bend economy is adding to Prineville’s housing shortage, Forrester and others said. In Bend, growing demand for housing and high construction costs are pushing up the price of homes and rentals and reducing the rental vacancy rate to 1 percent or less.

Some new arrivals have found housing in Redmond, Prineville and other outlying communities and commute to jobs in Bend.

Recent counts show more traffic moving in and out of Prineville today than five years ago. In 2010, a counting station on state Highway 126 in Powell Butte indicated an average 7,100 daily trips, based on traffic counted in mornings and evenings.

In 2014, that number was up to an average 8,200 daily trips. So far this year, an average 8,600 daily trips are counted at Powell Butte, according to Oregon Department of Transportation data.

“As Bend goes, Prineville will follow,” Forrester said. “All of the attributes that Prineville has that made Central Oregon one of the fastest growing regions in the country (10 years ago) are still there.”